Lyra Belacqua (DAKOTA BLUE RICHARDS) is a young girl living in a parallel Earth who knows how to fend for herself and defend her good friend Roger Parslow (BEN WALKER) from bullies such as Billy Costa (CHARLIE ROWE). Her only relative is her uncle, explorer and scientist Lord Asriel (DANIEL CRAIG) whose discovery of dust from another world has him in hot water with the land's ruling body, The Magisterium.
One of its leaders, Fra Pavel (SIMON McBURNEY), isn't pleased with Lord Asriel's work, particularly since it indicates that this other world's inhabitants might have internal souls, compared to the external, animal-based ones known as daemons that accompany all of who live in Lyra's land. Hers is called Pantalaimon (voice of FREDDIE HIGHMORE), and constantly shape-shifts from one animal form to the next, all dependent on it and its human owner's mood and emotional level at the time.
With word of increased activities by figures known as the Gobblers -- who abduct kids for the Magisterium and then remove their free will -- Lyra is happy when a striking woman, Marisa Coulter (NICOLE KIDMAN), chooses the young girl to accompany her on her next journey.
Unbeknownst to Marisa, Lyra's schoolmaster has given the girl the last known Golden Compass, a now forbidden device that tells its holder all that's true. When Lyra then learns that Marisa might by the ruler of the Gobblers and that Roger, Billy and other kids have been abducted by them, the young girl sets out to rescue the kids.
Helped by various Gyptians such as John Faa (JIM CARTER) and Farder Coram (TOM COURTENAY), and later accompanied by beautiful witch Serafina Pekkala (EVA GREEN), wily aeronaut Lee Scoresby (SAM ELLIOT), and armored bear lorek Byrnison (voice of IAN McKELLEN), Lyra heads for the icy fortress where the kids are being held, all in hopes of freeing them from the influence of The Magisterium, while Byrnison desires to regain his throne from current bear king Ragnar Sturlusson (voice of IAN McSHANE).